US EditionYardeni Raises Odds of Market Meltdown to 35% as Iran War Risks Rattle Global Investors
Ed Yardeni raised the meltdown risk to 35% due to Iran-driven oil prices surpassing $100/barrel, potentially triggering inflation and stagflation, while meltup odds dropped to 5%.
- On Monday, Ed Yardeni, president of Yardeni Research, raised the probability of a U.S. market meltdown to 35% from 20%, linking the increase to an oil spike driven by the war in Iran.
- Crude oil topped $100 a barrel over the weekend, following strikes that began on February 28 and attacks near the Strait of Hormuz that threaten tanker traffic.
- Volatility rose as the VIX hit its highest level since April, MSCI's global equity gauge fell 3.7%, and S&P 500 futures dropped more than 2% in Asian trading; Bitcoin traded at $67,378 on Monday and has held up better than expected, with only about 25% of its moves explained by stock correlation, per NYDIG's Greg Cipolaro.
- Yardeni cut the odds of a meltup to 5%, continues to assign a 60% probability to the Roaring 2020s scenario, and sees a likely 10% to 15% correction with a 15% stagflating 1970s Redux risk.
- Rising gasoline prices and fertilizer risks could limit Fed easing and trigger a food-price shock, Yardeni warned, if Strait traffic remains constrained.
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The Iran war has caused investors to react much more strongly than before, as oil prices skyrocketed on Monday.
Stagflation could trigger a stock market 'meltdown' that ends the bull rally, market vet says
Spencer Platt/Getty ImagesThe oil price shock has raised the odds of a stock meltdown to 35%, Ed Yardeni says.The Wall Street vet thinks it's more likely the economy could see a repeat of 1970s-style stagflation.His firm's base case remains a Roaring 2020s scenario, with stocks rising through the decade. The oil scenario markets have feared is here, and it risks derailing the stock market's bull run, according to a longtime strategist.In a note …
Yardeni raises odds of market meltdown to 35% as Iran war risks rattle global investors
Market strategist Ed Yardeni has raised the probability of a market meltdown to 35 per cent as the escalating war involving Iran drives oil prices above $100 a barrel, threatens inflation and complicates policy decisions for the Federal Reserve
Bitcoin could face deeper downside as odds of U.S. market meltdown rise to 35%
Veteran strategist Ed Yardeni raised his probability of a stock market crash this year as oil tops $100, the dollar posts its best week in a year, and the Iran conflict expands to Saudi Arabia.
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